Chan vs.

Maceda, April 30, 2003

Facts:

Maceda, Jr., obtained a loan from the Development Bank of the Philippines for the construction of his New
Gran Hotel Project. Thereafter, Maceda entered into a building construction contract with Moreman Builders
Co. Maceda purchased various construction materials and equipment in Manila. Moreman, in turn, deposited
them in the warehouse of the Chans. The deposit was free of charge. Unfortunately, Moreman failed to finish
the construction of the hotel at the stipulated time. Hence, Maceda filed an action for rescission and damages
against Moreman.

RTC: rescinded the contract between Moreman and Maceda and awarding to Maceda actual, moral and
liquidated damages; the increase in the construction materials; and attorney's fees. Meanwhile, during the
pendency of the case, Maceda ordered Chans to return to him the construction materials and equipment which
Moreman deposited in their warehouse. Chans, however, told them that Moreman withdrew those construction
materials.

RTC: rendered a decision in favor of respondent. Maceda is entitled to payment of damages for the overhauling
of materials from the construction site by Lily Chan without the knowledge and consent of its owner. As to the
materials stored inside the bodega of defendant Wilson Chan, the inventory shows that the same were owned by
the New Gran Hotel. Said materials were stored by Moreman since it was attested to by the warehouseman as
without any lien or encumbrances, the defendants are duty bound to release it. Maceda is entitled to payment of
actual damages based on the inventory and the payment of bags of cement and bundles of steel bars. CA:
affirmed in toto RTC’s decision.

Issues: (1) Has respondent presented proof that the construction materials and equipment were actually in
petitioners' warehouse when he asked that the same be turned over to him? (2) If so, does respondent have the
right to demand the release of the said materials and equipment or claim for damages?

Held:

At the outset, the case should have been dismissed outright by the trial court because of patent procedural
infirmities. Also, the case should also be dismissed for utter lack of merit.

Under Article 1311 of the CC, contracts are binding upon the parties (and their assigns and heirs) who execute
them. When there is no privity of contract, there is likewise no obligation or liability to speak about and thus no
cause of action arises. Specifically, in an action against the depositary, the burden is on the plaintiff to
prove the bailment or deposit and the performance of conditions precedent to the right of action. A
depositary is obliged to return the thing to the depositor, or to his heirs or successors, or to the person
who may have been designated in the contract.

In the present case, there’s no contract of deposit, oral or written, between the parties, only between petitioners
and Moreman. And granting arguendo that there was indeed a contract of deposit between petitioners and
Moreman, it is still incumbent upon Maceda to prove its existence and that it was executed in his favor.
Considering that respondent failed to prove (1) the existence of any contract of deposit between him and
petitioners, nor between the latter and Moreman in his favor, and (2) that there were construction materials in
petitioners' warehouse at the time of respondent's demand to return the same, we hold that petitioners have no
corresponding obligation or liability to respondent with respect to those construction materials.

Anent the issue of damages, petitioners are still not liable because, as expressly provided for in Article 2199 of
the Civil Code, actual or compensatory damages cannot be presumed, but must be proved with reasonable
degree of certainty. A court cannot rely on speculations, conjectures, or guesswork as to the fact and amount of
damages, but must depend upon competent proof that they have been suffered by the injured party and on the
best obtainable evidence of the actual amount thereof.

Considering our findings that there was no contract of deposit between petitioners and respondent or Moreman
and that actually there were no more construction materials or equipment in petitioners' warehouse when
respondent made a demand for their return, we hold that he has no right whatsoever to claim for damages.
CA Agro-Industrial vs. CA, March 3, 1993
Facts:

Petitioner and the spouses Pugao entered into an agreement whereby the former purchased from the latter 2
parcels of land. A downpayment was made while the balance was covered by 3 postdated checks. Among the
terms and conditions of the agreement were that the titles to the lots shall be transferred to the petitioner upon
full payment of the purchase price and that the owner's copies of the certificates of titles thereto shall be
deposited in a safety deposit box of any bank. The same could be withdrawn only upon the joint signatures of a
representative of the petitioner and the Pugaos upon full payment of the purchase price. Petitioner and the
Pugaos then rented Safety Deposit Box of Security Bank and Trust Company. For this purpose, both signed a
contract of lease which contains, the following conditions:

13. The bank is not a depositary of the contents of the safe and it has neither the possession nor control of the
same. 14. The bank has no interest whatsoever in said contents, except herein expressly provided, and it
assumes absolutely no liability in connection therewith.
2 renter's keys were given to petitioner and Pugaos. A guard key remained in the possession of the Bank. The
safety deposit box has 2 keyholes, and can be opened only with the use of both keys. Petitioner claims that the
certificates of title were placed inside the said box. Thereafter, Ramos offered to buy from the petitioner the 2
lots and demanded the execution of a deed of sale which necessarily entailed the production of the certificates
of title. Petitioner and Pugaos opened the safety deposit box but no certificates were there. Because of the delay
in the reconstitution of the title, Ramos withdrew her earlier offer to purchase the lots; as a consequence thereof,
the petitioner allegedly failed to realize the expected profit. Hence, the petitioner filed a complaint for damages
against the respondent Bank

Issue: Is the contractual relation between a commercial bank and another party in a contract of rent of a safety
deposit box with respect to its contents placed by the latter one of bailor and bailee or one of lessor and lessee?

Held:

The contract for the rent of the safety deposit box is not an ordinary contract of lease as defined in
Article 1643 of the Civil Code. However, the same is a contract of deposit that is to be strictly governed
by the provisions in the Civil Code on deposit;  the contract in the case at bar is a special kind of deposit.
It cannot be characterized as an ordinary contract of lease under Article 1643 because the full and
absolute possession and control of the safety deposit box was not given to the petitioner and the Pugaos.
The guard key of the box remained with the respondent Bank; without this key, neither of the renters could
open the box. On the other hand, the respondent Bank could not likewise open the box without the renter's key.
In this case, the said key had a duplicate which was made so that both renters could have access to the box.

The prevailing rule is that the relation between a bank renting out safe-deposit boxes and its customer with
respect to the contents of the box is that of a bail or and bailee, the bailment being for hire and mutual benefit.
Section 72 of the General Banking Act pertinently provides: Sec. 72. In addition to the operations specifically
authorized elsewhere in this Act, banking institutions other than building and loan associations may perform
the following services:(a) Receive in custody funds, documents, and valuable objects, and rent safety deposit
boxes for the safeguarding of such effects.

Note that the primary function is still found within the parameters of a contract of deposit. The renting out of
the safety deposit boxes is not independent from, but related to or in conjunction with, this principal function. A
contract of deposit may be entered into orally or in writing and the parties thereto may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order or public policy. Accordingly, the depositary would be liable if, in
performing its obligation, it is found guilty of fraud, negligence, delay or contravention of the tenor of the
agreement.  In the absence of any stipulation prescribing the degree of diligence required, that of a good father
of a family is to be observed.  Hence, any stipulation exempting the depositary from any liability arising from
the loss of the thing deposited on account of fraud, negligence or delay would be void for being contrary to law
and public policy.

The Bank's exoneration should be based on the fact that no competent proof was presented to show that
respondent Bank was aware of the agreement between the petitioner and the Pugaos to the effect that the
certificates of title were withdrawable from the safety deposit box only upon both parties' joint signatures, and
that no evidence was submitted to reveal that the loss of the certificates of title was due to the fraud or
negligence of the respondent Bank. This in turn flows from this Court's determination that the contract involved
was one of deposit. Since, however, the petitioner cannot be blamed for the filing of the complaint and no bad
faith on its part had been established, the trial court erred in condemning the petitioner to pay the Bank
attorney's fees.

Serrano v. Central Bank of the Philippines

Facts:
In 1966, Serrano made a time deposit, for 1 year with 6% interest, of P150,000.00 with the respondent Overseas
Bank of Manila. Maneja also made a time deposit, for 1 year with 6-½% interest of P200,000.00 with the same
respondent Overseas Bank of Manila. Notwithstanding series of demands for encashment of the aforementioned
time deposits from the respondent Overseas Bank of Manila, not a single one of the time deposit certificates
was honored by Overseas Bank of Manila.
Respondent Central Bank admits that it is charged with the duty of administering the banking system of the
Republic and it exercises supervision over all doing business in the Philippines, but denies the Serrano’s
allegation that the Central Bank has the duty to exercise a most rigid and stringent supervision of banks,
implying that respondent Central Bank has to watch every move or activity of all banks, including respondent
Overseas Bank of Manila. Respondent Central Bank claims that the Overseas Bank of Manila, while operating,
was only on a limited degree of banking operations since the Monetary Board decided in its Resolution No. 322
to prohibit the Overseas Bank of Manila from making new loans and investments in view of its chronic reserve
deficiencies against its deposit liabilities. This limited operation of respondent Overseas Bank of Manila
continued up to 1968. Respondent Central Bank also denied that it is guarantor of the permanent solvency of
any banking institution as claimed by petitioner. It claims that neither the law nor sound banking supervision
requires respondent Central Bank to advertise or represent to the public any remedial measures it may impose
upon chronic delinquent banks as such action may inevitably result to panic or bank "runs". It likewise denied
that a constructive trust was created in favor of petitioner and his predecessor in interest Maneja when their time
deposits were made in 1966 and 1967 with the respondent Overseas Bank of Manila as during that time the
latter was not an insolvent bank and its operation as a banking institution was being salvaged by the respondent
Central Bank.
Issue: Whether the Central Bank is Liable for the case filed?
Held:
No, Bank deposits are in the nature of irregular deposits. They are really loans because they earn interest. All
kinds of bank deposits, whether fixed, savings, or current are to be treated as loans and are to be covered by the
law on loans. Current and savings deposit are loans to a bank because it can use the same. The petitioner here in
making time deposits that earn interests with respondent Overseas Bank of Manila was in reality a creditor of
the respondent Bank and not a depositor. The respondent Bank was in turn a debtor of petitioner. Failure of the
respondent Bank to honor the time deposit is failure to pay s obligation as a debtor and not a breach of trust
arising from depositary’s failure to return the subject matter of the deposit.
De los Santos vs. Tan Khey, July 30, 1962
Facts:
De los Santos lodged in the International Hotel in Iloilo City, which was owned by Tan Khey. When Plaintiff
arrived in the hotel, he left shortly thereafter, depositing his revolver and bag with a certain Abutanatin. The
latter was in charge of the hotel. The bag contained a birthstone ring, an eyeglass, and a pocketbook. He
returned that evening and took his things from Abutanatin. When he got into his room, he locked the door and
went to sleep. The next morning, he woke up and found that the door to his room was open and that his pants
and bag containing the revolver were missing. When he reported the incident to the authorities, a secret service
agent investigated the matter and found that a wall of the room of the Plaintiff was only 7 feet high and had an
opening from which one could enter from the outside. Tan Khey disclaims liability for the loss, saying that the
things were not deposited with the manager at the time they were lost despite notice to that effect posted in the
hotel. He likewise claims that to be liable under Art. 1998 of the Civil Code, the following must concur: (1)
Deposit of effects made by travelers in hotels or inns. (2) Notice was given to the hotel keeper or employee of
the effects brought by guests (3) That the guests/travelers take the precautions advised by the hotel
keepers/employees relative to the vigilance of their effects
Issue: W/N Tan Khey, as owner of the hotel, is liable for the loss despite their being lost not while in actual
custody of an employee of the hotel, having no notice of the effects lost, and for failure of De los Santos to take
the necessary precautions advised by the hotel.
Held:
YES. Under Art. 1998, when the law speaks of “depositing of effects by travelers in hotels or inns,” it does not
mean that there is a personal receipt by the innkeeper of such effects. This is so because nature of the business
of an innkeeper is not only to provide lodgings, but also to provide security to their persons and effects. Such
security is not only confined to those effects actually delivered to the innkeeper for safekeeping, but also to all
effects brought in the hotel. Also, a hotel has supervision and control of the premises thereof. The guests being
strangers to the place, they must rely on the vigilance and protection of the innkeepers over the effects placed in
the premises of the hotel. Thus, it is not even necessary that the effects be actually delivered to the innkeeper
hold him liable. It is sufficient that such effects are within the inn. This liability is not discharged even if the
effects are in the personal custody of the guest but still within the inn or hotel.
However, since Plaintiff failed to give notice of the contents of the bag at the time of his check-in, Defendant
cannot be held liable on the value of these contents. Only the value of the bag, revolver, and pants can be
recovered since notice thereof was unnecessary considering that they were in plain view. As to Defendant’s
contention that there was a notice posted in the hotel on how things are to be deposited and therefore the failure
of the Plaintiff to heed such notice bars him from recovery, such contention cannot be maintained. Though a
hotel can impose rules and regulations, such must be just and reasonable.
In this case, it was unreasonable for the Plaintiff to be required to deposit the items stolen considering that he
needs the gun for protection, the pants to have something to wear and there is no cogent reason for him to
deposit his bag. He even locked the door before he went to sleep which is evidence of due diligence. Contention
on measure of damages omitted.
YHT Realty vs. CA, February 17, 2005
Facts:
Private Respondent was an Australian businessman-philanthropist who stayed in a Suites owned by the YHT
Realty. The Private Respondent rented a safety deposit box with the said Suite. In Renting the box, he was
asked to sign a waiver “Undertaking for The Use of Safety Deposit Box” which exonerating the Hotel, its
Management and Employees from liability in case of loss of the item in the box. The companion of the
respondent Tan, while the latter was sleeping with the assistance of the staff of the Hotel, was allowed to open
the depositary box of Respondent. When the respondent opened the box, he Notice in a number of occasion that
the Money he placed in the box was either missing or lacking. When he confronted the Management of the
hotel, the latter advised that it was his companion Tan who opened the box.
The respondent went to the RTC and filed a complaint against the Petitioner
RTC: The Management of the Hotel was negligent for allowing a 3 rd person to open the box which the
Respondent rented from them. The Hotel and its staff are liable for the actual and Moral damages that the
Respondent lost.
Issue: Whether the “Undertaking For The Use of Safety Deposit Box” executed by the Private Respondent to
exonerate the hotel prom liability is null and void?
Held:
Yes, Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he
is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest
whereby the responsibility of the former as set forth in Articles 1998 to 2001 is suppressed or diminished shall
be void. Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to
apply to situations such as that presented in this case.
The hotel business like the common carrier’s business is imbued with public interest. Catering to the public,
hotelkeepers are bound to provide not only lodging for hotel guests and security to their persons and belongings.
The twin duty constitutes the essence of the business. The law in turn does not allow such duty to the public to
be negated or diluted by any contrary stipulation in so-called “undertakings” that ordinarily appear in prepared
forms imposed by hotel keepers on guests for their signature.
Paragraphs (2) and (4) of the “undertaking” manifestly contravene Article 2003 of the New Civil Code for they
allow Tropicana to be released from liability arising from any loss in the contents and/or use of the safety
deposit box for any cause whatsoever. Evidently, the undertaking was intended to bar any claim against
Tropicana for any loss of the contents of the safety deposit box whether or not negligence was incurred by
Tropicana or its employees.
The New Civil Code is explicit that the responsibility of the hotel-keeper shall extend to loss of, or injury to, the
personal property of the guests even if caused by servants or employees of the keepers of hotels or inns as well
as by strangers, except as it may proceed from any force majeure. It is the loss through force majeure that may
spare the hotel-keeper from liability. In the case at bar, there is no showing that the act of the thief or robber was
done with the use of arms or through an irresistible force to qualify the same as force majeure.
Durban Apartments vs. Pioneer Insurance, January 12, 2011

Facts:
In 2003, Pioneer Insurance and Surety Corporation, by right of subrogation, filed with the RTC a Complaint for
Recovery of Damages against Durban Apartments Corporation, doing business under the name and style of City
Garden Hotel, and Vicente Justimbaste. Respondent averred that: it is the insurer for loss and damage of Jeffrey
S. See’s [the insured’s] Suzuki Vitara
In 2002, See arrived and checked in at the City Garden Hotel before midnight, and its parking attendant,
defendant Justimbaste got the key to said Vitara from See to park it. See was awakened in his room by a
telephone call from the Hotel Chief Security Officer who informed him that his Vitara was carnapped while it
was parked unattended at the parking area of Equitable PCI Bank along Makati Avenue. See went to see the
Hotel Chief Security Officer, thereafter reported the incident to the Operations Division of the Makati City
Police Anti-Carnapping Unit,
The Makati City Police Anti-Carnapping Unit investigated Hotel Security Officer, Horlador, Jr. and defendant
Justimbaste;
Pioneer Insurance paid the ₱1,163,250.00 money claim of See and mortgagee ABN AMRO Savings Bank, Inc.
as indemnity for the loss of the Vitara; the Vitara was lost due to the negligence of Durban Apartments and
Justimbaste because it was discovered during the investigation that this was the 2nd time that a similar incident
of carnapping happened in the valet parking service of Durban Apartments and no necessary precautions were
taken to prevent its repetition;
Durban Apartments was wanting in due diligence in the selection and supervision of its employees particularly
defendant Justimbaste; Justimbaste and Durban Apartments failed and refused to pay its valid, just, and lawful
claim despite written demands.
Issue: Whether petitioner is liable to respondent for the loss of See’s vehicle?
Held:
Respondent substantiated the allegations in its complaint, i.e., a contract of necessary deposit existed between
the insured See and petitioner. On this score, we find no error in the following disquisition of the appellate
court:
Records also reveal that upon arrival at the City Garden Hotel, See gave notice to the doorman and parking
attendant of the said hotel, Justimbaste, about his Vitara when he entrusted its ignition key to the latter.
Justimbaste issued a valet parking customer claim stub to See, parked the Vitara at the Equitable PCI Bank
parking area, and placed the ignition key inside a safety key box while See proceeded to the hotel lobby to
check in. The Equitable PCI Bank parking area became an annex of City Garden Hotel when the management
of the said bank allowed the parking of the vehicles of hotel guests thereat in the evening after banking hours.
Article 1962, in relation to Article 1998, of the Civil Code defines a contract of deposit and a necessary deposit
made by persons in hotels or inns: “A deposit is constituted from the moment a person receives a thing
belonging to another, with the obligation of safely keeping it and returning the same. If the safekeeping of the
thing delivered is not the principal purpose of the contract, there is no deposit but some other contract.”
Art. 1998. “The deposit of effects made by travelers in hotels or inns shall also be regarded as necessary. The
keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them,
or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the
precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their
effects.”
Plainly, from the facts found by the lower courts, the insured See deposited his vehicle for safekeeping with
petitioner, through the latter’s employee, Justimbaste. In turn, Justimbaste issued a claim stub to See. Thus, the
contract of deposit was perfected from See’s delivery, when he handed over to Justimbaste the keys to his
vehicle, which Justimbaste received with the obligation of safely keeping and returning it. Ultimately, petitioner
is liable for the loss of See’s vehicle.

Guingona, Jr. vs. City Fiscal of Manila, April 4, 1984

Facts:
David invested several deposits with the Nation Savings and Loan Association. He said that he was induced into
making said investments by an Australian national who was a close associate of the NSLA officials. NSLA was
placed under receivership by the Central Bank, so David filed claims for his and his sister’s investments.
Guingona and Martin, upon David’s request, assumed the bank’s obligation to David by executing a joint
promissory note. David received a report that only a portion of his investments was entered in the NSLA
records.
David filed a which case assigned to Asst. City Fiscal Lota for preliminary investigation. David charged
petitioners with estafa and violation of Central Bank Circular No. 364 and related regulations on foreign
exchange transactions. Petitioners moved to dismiss the charges against them for lack of jurisdiction because
David's claims allegedly comprised a purely civil obligation, but the motion was denied. After the presentation
of David's principal witness, petitioners filed this petition for prohibition and injunction because:
a. The production of various documents showed that the transactions between David and NSLA were simple
loans (civil obligations which were novated when Guingona and Martin assumed them)
b. David's principal witness testified that the duplicate originals of the instruments of indebtedness were all on
file with NSLA.
Issue: Whether the contract between NSLA and David is a contract of depositor or a contract of loan (Which
answer determines whether the City Fiscal has the jurisdiction to file a case for estafa)
Held:
When David invested his money on time and savings deposits with NSLA, the contract that was perfected was
a contract of simple loan or mutuum and not a contract of deposit. Hence, the relationship between David and
NSLA is that of creditor and debtor, consequently, the ownership of the amount deposited was transmitted to
the Bank upon the perfection of the contract and it can make use of the amount deposited for its banking
operations, such as to pay interests on deposits and to pay withdrawals..
While the Bank has the obligation to return the amount deposited, it has no obligation to return or deliver the
same money that was deposited. NSLA’s failure to return the amount deposited will not constitute estafa
through misappropriation punishable under Article 315, par. (b) of the Revised Penal Code, but it will only give
rise to civil liability over which the public respondents have no jurisdiction.
Considering that petitioners’ liability is purely civil in nature and that there is no clear showing that they
engaged in foreign exchange transactions, public respondents acted without jurisdiction when they investigated
the charges against the petitioners. Public respondents should be restrained from further proceeding with the
criminal case for to allow the case to continue would work great injustice to petitioners and would render
meaningless the proper administration of justice.
Even granting that NSLA’s failure to pay the time and savings deposits would constitute a violation of RPC
315, paragraph 1(b), any incipient criminal liability was deemed avoided. When NSLA was placed under
receivership, Guingona and Martin assumed the obligation to David, thereby resulting in the novation of the
original contractual obligation. The original trust relation between NSLA and David was converted into an
ordinary debtor-creditor relation between the petitioners and David. While it is true that novation does not
extinguish criminal liability, it may prevent the rise of criminal liability as long as it occurs prior to the filing of
the criminal information in court.